Speaker 1: From Schwartz Media. I'm Ruby Jones.
Speaker 2: This is seven AM. It was one of the biggest
Speaker 2: corporate scandals the country has ever seen.
Speaker 3: Much of the focus and outrage in parliament House over
Speaker 3: the past week is centered on the extraordinary breach of
Speaker 3: trust at PWC's is.
Speaker 1: One of the most stunning business stories of the year.
Speaker 4: Really, when the torch has been shot upon it, it's
Speaker 4: refused to open itself.
Speaker 2: Up when it was revealed that PwC had used confidential
Speaker 2: government information to enrich itself and its corporate clients. Since then,
Speaker 2: there have been two parliamentary inquiries, an AFP investigation, nine
Speaker 2: investigations by the Tax Practitioners Board, one internal review, and
Speaker 2: an investigation by the international arm of the company. Yet
Speaker 2: important questions remain unanswered. Today Special Correspondent Jason Kotsukus on
Speaker 2: the key questions at the center of the tax leak
Speaker 2: scandal and when we can expect answers to them.
Speaker 1: It's Tuesday, July thirty. Jason.
Speaker 2: When the PwC tax leak story first broke, it was
Speaker 2: a huge story. How quickly do you think you realized
Speaker 2: the scope of what we were dealing with.
Speaker 4: So when the first story was written about this. I
Speaker 4: didn't really understand the significance of what had happened. The
Speaker 4: first story was about Peter John Collins, PWC's former head
Speaker 4: of international tax, someone i'd never heard of, being suspended
Speaker 4: by the Tax Practitioners Board. It wasn't until a couple
Speaker 4: of weeks later that I really understood that Peter John
Speaker 4: Collins had agreed on a strictly confidential basis to help
Speaker 4: the Australian government plan and write multinational anti avoidance tax laws,
Speaker 4: and then before those laws were introduced in twenty sixteen,
Speaker 4: he had knowingly shared what he knew with companies here
Speaker 4: in Australia and overseas and was trying to help them
Speaker 4: avoid the very laws that Peter Collins had helped the
Speaker 4: Australian government.
Speaker 3: Right, they say one partner shared the information, They say,
Speaker 3: we should have had a policy in play.
Speaker 4: Tom Seymour, the CEO, he came out and said, look,
Speaker 4: this is just one bad apple and it was just
Speaker 4: him only he knew about.
Speaker 3: It all to that there is a risk that one
Speaker 3: could perceive with the exact words, that in all of
Speaker 3: his dealings there was a conflict.
Speaker 4: It wasn't until journalist started asking more questions, and that
Speaker 4: the Senate got involved. You know, through Deborah O'Neil and
Speaker 4: Barbara Pocock, that we understood that there were about thirty
Speaker 4: five people inside PwC that knew about it, possibly more,
Speaker 4: and that there were these fourteen clients who'd been provided
Speaker 4: with the advice and had been helped to sidestep the
Speaker 4: new tax laws.
Speaker 5: In recent days, it's become very clear that the PwC
Speaker 5: Price Waterhouse Coopers used secret government information that belongs to
Speaker 5: the Australian people to advise clients how to sidestep new
Speaker 5: tax laws that were under construction.
Speaker 4: That's when it all kind of started to really become
Speaker 4: clear that this was an outrageous breach of trust that
Speaker 4: involved not just one person but the whole of the
Speaker 4: PwC Australia tax practice. Then, I guess, like most people,
Speaker 4: I felt pretty outraged about it.
Speaker 2: I think a lot of people felt that way. In
Speaker 2: your opinion, what has the response from PwC been like
Speaker 2: so far?
Speaker 4: Well, right from the beginning, the then chief executive of PwC,
Speaker 4: Tom Seymour, was anything but transparent about the nature of
Speaker 4: what had happened and how many people knew about it,
Speaker 4: and Tom Seymour's attempts to cover up what had happened
Speaker 4: have kind of been continued by every other person at
Speaker 4: PwC that has spoken publicly about this. They haven't been
Speaker 4: frank and open and honest about what happened. And I
Speaker 4: think we really still don't understand who exactly inside PwC
Speaker 4: received this confidential information from Peter John Collins. And then
Speaker 4: we need to know what companies that PwC tried to
Speaker 4: use that information to win new business with. And that's
Speaker 4: another thing that they have refused to disclose. There was
Speaker 4: an internal investigation that was commissioned by PwC International. They
Speaker 4: commissioned a law firm Link Leaders to investigate. They said
Speaker 4: that they would make that report public, but that report
Speaker 4: remains secret, and I think there's still, yeah, lots of questions.
Speaker 2: To answer here, right, So why is it that that
Speaker 2: internal investigation has not been released as was promised?
Speaker 1: Why is it secret?
Speaker 4: Well, it's a really good question, and despite multiple requests
Speaker 4: from the Senate and the House of Representatives to see
Speaker 4: the report, PwC Global has steadfastly refused to release it,
Speaker 4: claiming that it contains all this privileged information that's confidential
Speaker 4: to PwC, and even PwC Australia Chief executive Kevin Burrows,
Speaker 4: who receives more than a quarter of his four million
Speaker 4: dollars and your salary from PwC International, claims that he
Speaker 4: hasn't even seen a copy of the report.
Speaker 1: Have you read those reports?
Speaker 3: There are no reports, Senator at this one. There is.
Speaker 3: We had investigation that was conducted with them by them,
Speaker 3: and we received legal advice from them.
Speaker 2: I don't know.
Speaker 4: I find that hard to believe, but I guess we
Speaker 4: have to take his word for that. But I think
Speaker 4: the fact that PwC haven't been prepared to release the
Speaker 4: report tells us that there's something pretty serious contained in
Speaker 4: its pages.
Speaker 2: So which PwC executives still haven't been held accountable. That's
Speaker 2: after the.
Speaker 1: Break, Jason.
Speaker 2: On Friday, we'll be hearing more evidence from PwC at
Speaker 2: a Senate hearing. The current chief executive, Kevin Burrows is
Speaker 2: due to speak. What questions do you think that he
Speaker 2: needs to answer.
Speaker 4: I think he could start with telling us how much
Speaker 4: money he makes, because up until now Kevin Burrows has
Speaker 4: obfuscated and dissembled and proved unable to answer that one
Speaker 4: basic question. When he was first asked that question, he
Speaker 4: said his annual salary was two point four million a year.
Speaker 5: Mister Burrow's what is your salary in the role that
Speaker 5: you're in.
Speaker 3: Currently two point four million dollars said.
Speaker 5: Thank you very much, mister Burros, and thank you for
Speaker 5: being a.
Speaker 4: Couple of days later he sought to correct the record
Speaker 4: and inform the Senate that his actual salary was two
Speaker 4: point eight million a year. And then last month Burrows
Speaker 4: advised the same Senator, Deborah O'Neil, the Labor senator who's
Speaker 4: been leading a lot of the investigation on this, he
Speaker 4: was actually getting a one point two million dollar top
Speaker 4: up each year courtesy of PwC International for undefined services
Speaker 4: to the PwC network. You know, Kevin Burrow's salary is
Speaker 4: not material to the fundamental wrongdoing that took place here,
Speaker 4: but it's a kind of measure of his preparedness to
Speaker 4: be open and honest with the Australian public. And if
Speaker 4: he can't answer that basic question, then what does it
Speaker 4: say about the rest of his testimony that he's provided
Speaker 4: so far and that we're can hear on Friday.
Speaker 2: And in terms of Kevin Burrows and the transparency that
Speaker 2: we can fairly expect from him. He took over as
Speaker 2: the chief executive of PwC after the scandal broke, so
Speaker 2: after Tom Seymour was forced to resign. So to what
Speaker 2: extent do you think that we, the public and the
Speaker 2: Senate can really hold him responsible for things that happened
Speaker 2: before his tenure.
Speaker 4: Well, I don't think we can hold him responsible for
Speaker 4: the actions of Peter John Collins and the other partners
Speaker 4: at PwC Australia, but I think we can hold him
Speaker 4: accountable for what's happened since then. So Kevin Burrows is
Speaker 4: career PwC partner. He was based in Singapore and the
Speaker 4: Global Board clearly tapped him on the shoulder and said
Speaker 4: we need you to go down to Sydney and try
Speaker 4: to clean up the mess in PwC Australia. So Kevin
Speaker 4: Burrows has walked into a very messy situation. The partnership
Speaker 4: was effectively involved in a civil war, and he's encountered
Speaker 4: a lot of resistance. I think internally people are resentful
Speaker 4: that an outsider was appointed to the PwC Australia partnership.
Speaker 4: Partnership are resentful that they've all been forced to take
Speaker 4: a pay cut, a significant pay cut. The total staff
Speaker 4: that have been forced out is around seven hundred. So
Speaker 4: it's a very messy situation that Burrows has walked into,
Speaker 4: and I think that he has struggled to contain a
Speaker 4: lot of the internal anger within PwC over what's happened.
Speaker 2: And it isn't only Kevin Burrows who is due to
Speaker 2: come before the Senate, it's also his predecessors, including Luke
Speaker 2: Say who is actually in that role as chief executive
Speaker 2: when a lot of this conduct was underway. So what
Speaker 2: would you like to see him pressed on?
Speaker 4: Well, the thing that I most want to know is
Speaker 4: exactly what Luke Sayers knew about what was happening at
Speaker 4: PEWC under his watch. He's now, of course the president
Speaker 4: of the Carlton Football Club, a real mover and shaker
Speaker 4: in the Melbourne political, social and business circles, and up
Speaker 4: to now he's managed to sort of kind of weave
Speaker 4: his way through all of the flat that has been
Speaker 4: coming his way. But the main focus of the committee
Speaker 4: hearing on Friday has to be to hold Luke Sayers
Speaker 4: to account and really get to the bottom of what
Speaker 4: he knew about what was going on at PwC while
Speaker 4: he was running the show.
Speaker 2: And just finally, Jason, what does it say to you that,
Speaker 2: more than a year on from this story breaking was
Speaker 2: still falling far short of full transparency when it comes
Speaker 2: to what PwC did and didn't do, that there still
Speaker 2: seems to be this effort to contain the damage. Do
Speaker 2: you think that the PwC still thinks that it can
Speaker 2: come back from this, that it can regain the trust
Speaker 2: of the Australian government and the public.
Speaker 4: Well, it suffered a massive hit to its reputation and
Speaker 4: even though I think the firm will survive, it's going
Speaker 4: to take a long time to recover. It wasn't just
Speaker 4: that they effectively stole this information from the Commonwealth.
Speaker 2: You know.
Speaker 4: One of the things that's angered me the most was,
Speaker 4: and we've seen this in the one hundred and forty
Speaker 4: four pages of emails that the Tax Practitioners Board obtained
Speaker 4: from PwC. And what we saw in those emails was
Speaker 4: just contempt for the Commonwealth. They just really took advantage
Speaker 4: of the Australian public here and tried to help their
Speaker 4: clients cheat the Australian taxpayer. Of tax revenue that they owed,
Speaker 4: and I feel that they haven't shown sufficient your remorse
Speaker 4: for the actions that were taken, and I don't think
Speaker 4: it will fully recover until it does offer full transparency
Speaker 4: about what happened.
Speaker 1: Jason, thank you so much for your time.
Speaker 4: Ruby, always a pleasure to talk with you. Thanks very much.
Speaker 2: Also in the news today, Foreign Minister Penny Wong has
Speaker 2: announced plans to limit China's influence in the Pacific with
Speaker 2: a new cable co co activity and Resilience Center designed
Speaker 2: to boost connectivity for Pacific nations. Australia has committed eighteen
Speaker 2: million dollars over the next four years for the center,
Speaker 2: which will be staffed by Australians. It will enable the
Speaker 2: sharing of information and regulation of undersea cables. And A
Speaker 2: commentator has been removed from Olympic Games coverage over a
Speaker 2: sexist remark about the Australian women's freestyle relay team. Eurostar
Speaker 2: commentator Bob Ballard was discussing the gold winning team when
Speaker 2: he suggested they were hanging around doing their makeup. I'm
Speaker 2: Ruby Jones. This is seven am.
Speaker 1: See you tomorrow.